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The Billion Prices Project

Initiatives and Related Projects

Some practical applications of our research

Inflacion Verdadera Argentina

A daily inflation index for Argentina. Published from 2007 to 2018 as an alternative to the official CPI which was manipulated by the government during the period 2007-2016. This is how we first started using online prices to measure inflation.

PriceStats Daily Inflation and PPP Statistics

PriceStats is the company that collects the online prices used by the BPP. It currently publishes daily inflation and PPP indices in over 20 countries.
Click here for a historical comparison of the US Online Index and the CPI.

For more up-to-date inflation metrics in over 20 countries see www.pricestats.com

Help us Measure Inflation in Venezuela

We need help collecting and validating prices in Venezuela. Whether you are local or not, you can help.

About US

What we do

"Big Data" for Macro and International Economics

The Billion Prices Project is an academic initiative that uses prices collected from hundreds of online retailers around the world on a daily basis to conduct research in macro and international economics. It was founded in 2008 by Alberto Cavallo and Roberto Rigobon. This page shows our most recent research and links to related projects.

Roberto Rigobon

Roberto is the Society of Sloan Fellows Professor of Management and a Professor of Applied Economics at the MIT Sloan School of Management, a research associate of the NBER, and a member of the Census Bureau’s Scientific Advisory Committee.

Paula Meloni

Recent Papers

American Economic Review, January 2017, Vol 107 (1)

Abstract: Online prices are increasingly used for measurement and research applications, yet little is known about their relation to prices in physical stores, where most retail transactions occur. I conduct the first large-scale comparison of prices simultaneously collected from the websites and physical stores of 56 large multi-channel retailers in 10 countries. I find that price levels are identical about 72 percent of the time. Price changes are not synchronized but have similar frequencies and average sizes. These results have im- plications for national statistical offices, researchers using online data, and anyone interested in the effect of the Internet on retail prices.

American Economic Journal: Macroeconomics, Forthcoming

Abstract: Information frictions play a central role in the formation of household inflation expectations, but there is no consensus about their origins. We address this question with novel evidence from survey experiments. We document two main findings. First, individuals in lower-inflation contexts have significantly weaker priors about the inflation rate. This finding suggests that rational inattention may be an important source of information frictions. Second, cognitive limitations also appear to be a source of information frictions: even when information about inflation statistics is made readily available, individuals still place a significant weight on less accurate sources of information, such as their memories of the price changes of the supermarket products they purchase. We discuss the implications of these findings for macroeconomic models and policy-making.

"The Billion Prices Project: Using Online Prices for Measurement and Research"

Alberto Cavallo and Roberto Rigobon

Journal of Economic Perspectives, Spring 2016, Vol 30(2): 151-78

Abstract: New data-gathering techniques, often referred to as “Big Data,” have the potential to improve statistics and empirical research in economics. This paper presents one example of how this can be achieved by using the vast number of online prices displayed on the web. We describe our work with the Billion Prices Project at MIT, and emphasize key lessons that can be used for both inflation measurement and some fundamental research questions in macro and international economics. In particular, we show how online prices can be used to construct daily price indexes in multiple countries and to avoid measurement biases that distort evidence of price stickiness and international relative prices.

For nine years, from 2007 to 2015, the Argentine government manipulated economic statistics in an attempt to fool the public into believing inflation was lower than it actually was. Citizens, however, didn’t buy it. In fact, they showed a remarkable aptitude for seeing through the claims.

The goal of mapping economic activity in real time, just as we do for weather or traffic, is “closer than ever to being within our grasp”, according to Andy Haldane, the Bank of England’s chief economist.

The growth of e-commerce is well understood, tracking the smartphone’s ubiquity and a global supply chain that delivers consumer goods quickly and cheaply. Its impact on inflation—the so-called Amazon effect—is still being explored by economists.

The recent financial crisis, and the euro area sovereign debt crisis that followed, were characterised by periods of increased heterogeneity, market fragmentation and sudden turns in economic activity. This often made it difficult for economic policymakers to understand and assess in real time the underlying forces driving economic behaviour. Both traditional statistical datasets and our-> Continue reading Policy analysis with big data -ECB Press

The purchasing power of one dollar is worth more online, according to software company Adobe’s Digital Price Index, which looked at online and offline spending. If consumers had shifted all of their offline spending last year to online, that difference would have meant saving about $2.2 billion, it estimated.

New price data from Adobe Systems Inc., released today, show that online increased its price advantage vs. offline over the past two years. Logically speaking, though, the gap can’t keep widening forever. And there are some hints in the data that online’s edge is already—well, not going away, but approaching its limit.

Adrian Ash, of BullionVault, writes exclusively for What Investment on the outlook for the gold price as inflation and interest rates rise.
Alongside Russia-US tensions and crisis-driven spikes in the oil price, suddenly inflation is back making headlines.[…]

Everyone knew something was wrong. Between 2007 and 2011, the Argentine government claimed inflation was running at an average of 8 per cent but the numbers did not tally with what households were experiencing.[…]

Statistics imply that real wages may be falling by 0.6% annually – compared with the 0.9% growth rate indicated by official data.
Prices in the UK are now rising at an annual rate of more than 3% in the latest evidence of economic fallout from the EU referendum, according to figures seen by Sky News.[…]

In the dying days of 2015 came news to set any geek’s pulse racing: the declaration of a “statistical emergency” by Mauricio Macri, the new president of Argentina. Macri’s move enabled Jorge Todesca, head of the statistics bureau, to suspend publication of some basic economic data.[…]

Online shopping is supposed to be a click away from bargains and cheap goods, but this is all a myth, says new research.
A study by the Massachusetts Institute of Technology of 10 countries, including South Africa, has shown that most firms sell their products at the…[…]

The Trump administration has some very optimistic economic targets. It should resist messing with the statistics.
The Soviet Union had a reputation for presenting fake economic statistics to the world, in order to avoid having its dysfunctional system look…[…]

Standing in the checkout line at Walmart waiting to buy a TV or the latest gadget, one might ponder whether it’s cheaper to buy the same television from Walmart online.
Turns out, it’s probably not.[…]

In an average of 72 percent of the cases, there is no price advantage to shop online instead of in the shop – or vice versa. This is the result of a recent study by the Massachusetts Institute of Technology (MIT) after analyzing online and offline prices in ten countries.[…]

Alberto Cavallo, Associate Professor of Applied Economics at the MIT Sloan School of Management, explains how online and offline prices compare. Everyone has their own personal opinion, but Prof. Cavallo and his team wanted to collect data in a large number of countries to answer the question with objective evidence.[…]

(Newsroom America) — When you buy products online, do you imagine you could get better prices in a store? Conversely, does in-store shopping lead you to wonder whether you are missing better prices online?
Fear not.[…]

Inflation is an average. Prices in some areas are growing quickly, while others fall. That’s the way it has to be in a broadly diversified economy. The broadest measure of inflation – the personal consumption deflator – measures everything that consumers buy, and weights it by how much, then spend on those items.[…]

Common sense isn’t so common when retail is still experiencing its fair share of upheavals from each new disruptor to make it to market, but the decade-plus of online and in-store retail operating side by side has established a few new ground rules that almost everyone can agree on.[…]

Online prices are generally the same as prices in the store, survey finds
If you’re a bargain hunter, it’s common to spend time researching prices before making purchases. After all, you wouldn’t want to buy a washing machine at your local Lowes store only to find a lower price offered on Lowes.com.[…]

Devoted shoppers may spend hours hunting for bargains online. But new research from the Massachusetts Institute of Technology finds that much of the time — about 72%, in fact — prices are identical to those in stores.[…]

Earlier this month, Argentina issued $16.5 billion in bonds in the largest emerging market debt deal on record, effectively returning to international capital markets for the first time after a following a plague of defaults over the past 15 years under the Christina Kirchner administration.[…]

Many shoppers assume that online prices are lower than in-store prices. However, a recent study by MIT Sloan Prof. Alberto Cavallo found that prices are actually identical about 72% of the time for products sold both online and offline.[…]

MIT Sloan study reveals information of use to consumers and economists
Sure, online shopping is generally more convenient than going to the store for your purchases, but prices are pretty much the same three quarters of the time, according to a new MIT study.[…]

Technically Incorrect: An MIT professor conducts a worldwide analysis of prices online and off. The results might surprise some.
Amazon has educated me in so many ways.It’s taught me that the “Lord of the Flies” was an excellent management book.It’s also taught me to believe that online prices are cheaper than those in stores.[…]

You find lower prices online than at bricks-and-mortar stores, right? Wrong.
Alberto Cavallo of the Massachusetts Institute of Technology displayed resourcefulness and ingenuity by producing a wide-scale international comparison of online and offline prices at “brick-and-motar” stores.[…]

Coles shoppers are paying a hefty premium on some groceries when they shop online and use the supermarket’s supposedly free “click and collect” service or home delivery.
Fairfax Media compared in-store and online prices on 10 popular brand label items at Coles and found eight of them were 10 per cent more expensive for online shoppers.[…]

Shopping online is cheaper right? Think again. Big data has helped challenge that conventional wisdom.
Alberto Cavallo, an economist at the Massachusetts Institute of Technology, has undertaken a huge, international comparison of the “online and offline” prices charged by big retailers.[…]

You find lower prices online than at bricks-and-mortar stores, right? Wrong.
Alberto Cavallo of the Massachusetts Institute of Technology displayed resourcefulness and ingenuity by producing a wide-scale international comparison of online and offline prices.[…]

Public debt in a court of (dumb) law
The parallels between Greece and Puerto Rico, which we have noted before, continue to evolve, but now a political dimension has been added to the economic one. The economic problem has to do with the combination of a public debt overhang and a shrinking population and economy.[…]